Page 8 - CIMA SCS Workbook August 2018 - Day 2 Tasks

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

TASK

Prepare a briefing paper for Den Rice as requested (Time allowed: 60 minutes)

(Refer to the reference materials below)

Reference Materials - Article on WorldMedia.com

Go Digital - or Go Bust!

The last three weeks has seen the reporting season for media companies begin, with many well-
established and some newer news organisations publishing their annual results. For many, this
has been a depressing three weeks!

A clear pattern is emerging, showing the contrasting fortunes of those newspaper companies that
are still (largely) following a traditional business model, and their younger competitors who have
only entered the industry in the last decade but which have a very different approach to selling
news to consumers.

TMG Group, one of the largest and oldest newspaper companies in Borland, reported that
revenues in 2017 had fallen by 9% compared to the previous year, and announced a further series
of redundancies for 2018.

PJ plc fared even worse; its sales had fallen by 11.3% over the same period, and it announced that
a review of its portfolio was underway which would undoubtedly lead to it being “rationalised” - a
nice way of saying that some titles would undoubtedly be axed.

FNG, which has been printing newspapers for over 130 years, filed accounts which showed that its
revenues in 2017 were over 8% lower than the previous year.

There is therefore clearly a pattern for the more traditional newspaper companies and how they
are performing in the new, digital age.

In contrast, IND plc, proud owners of the digital news platforms Working Week and Sports
Weekly, proudly announced in its first annual statement following a successful flotation that sales
were ahead of expectations, and its share price rose by 7%.

There would seem to be a clear message being sent to those who run the traditional print
companies; if you don’t embrace the digital age you might see your competitors reporting
gleefully that you are no longer a rival!

22 KAPLAN PUBLISHING